Saturday, March 30, 2024

Troubles and things to treasure at SIDE

Avatar photo
Dairying is at a critical point on the way to a secure future, an industry leader says. “We’re still in this transition between unrestrained opportunity and sustainable business,” DairyNZ productivity strategy and investment leader Bruce Thorrold told farmers at South Island Dairy Event.
Reading Time: 3 minutes

He warned farmers they will soon face a crackdown on mud and animal welfare.

“I want to alert you to a likely campaign against wintering coming up,” he said.

Thorrold elaborated on the pressures of farming with a talk called Shaping your Futur. 

It is easy to see why dairy farmers feel like they are doing a lot of work for little reward, he said.

“After two decades of unconstrained growth and increases in land and cow prices that turbo-charged optimism and business expansion, it’s all got a lot trickier

Thorrold listed worries including static or solid milk prices that are only around the long-run average. Increasing costs and capital repayments are making cashflow tight.

Farmers also feel threatened by the prospect of interest rate rises, environmental constraints including water quality regulations and greenhouse gas policy.

They are also losing out to Mycoplasma bovis and it is hard for virtually everyone to attract and keep staff. In the meantime .land and cow values are dropping and so are the number of farm sales.

“It’s hard to exit if you want to.”

Experts are pointing out that animal foods are a thing of the past because all the protein people will need will come from a lab, some GE yeast or a soybean.

“And while the public’s own view of dairy farming isn’t overly negative or that different from their view of other industries, it feels as though there is little affection or respect for dairy farming.”

The good news is that dairying has felt cornered before. Sixty years ago dairy farmers were the poor cousins of farming and most people predicted the industry was doomed when Britain joined in the European Economic Community (a forerunner to the European Union) in the early 1970s.

In the 1980s dairying was thumped by economic deregulation and the 1990s brought a long grind of low prices.

“We’ve had volatility of milk price in the last decade. But through all this we have a long history of adapting to new challenges.”

On the up side, dairying still has the most profitable land use at any scale in the country and the industry has achieved that by innovation in science and on-farm clear-thinking, sharing of problems and knowledge and sheer hard work.

Thorrold says  today’s farmers are better equipped than ever to face challenges. 

The factors in their favour include knowledge of how to make money from pasture-first dairy systems, despite not getting premium prices. Farmers are also adept at using profit to service debts and allowing time for repayments and restructuring.

The industry also has some mega-trends on its side, like growing world demand for dairy products. 

At the same time, it os becoming clear that producing alternatives isn’t that easy.

The producers of Perfect Day, milk made from yeast, had pivoted from producing whole dairy foods to milk proteins for the ingredients business. That is an irony given the flak dairying gets for being a commodity business.

Dairy ias also getting some certainty on environmental targets, such as the Government proposing a split gas approach to greenhouse emissions. 

“A 10% methane target by 2030 is doable. It simply means we have to have 10% less feed – we’ve got 10 years to make sure we can do it at low or no cost.”

Longer-term greenhouse gas targets and tree-planting for offsetting are less certain but the industry has research in the pipeline with feed additives, GE ryegrass and vaccines aimed at providing options.

New Zealand is now a world-leader in low greenhouse gas intensity dairying but the industry willhave to maintain that status in the face of technological improvements from the feedlot sector.

NZ dairy is also doing in-depth research on water quality, winter cropping, N input management and off-pasture systems. As a result, farmers have more options in the pipeline with plantain, catch crops and better farm infrastructure. The country also has a high standard of animal welfare, which helps to firm consumer confidence in NZ products.

It is concerning to see land values re-adjust in recent years but farmers exiting the industry will continue to create opportunities for others to enter.

“Farmers continue to be endlessly innovative in getting the best out of the technology and finding new ways to improve performance – and sharing this knowledge is still a big part of the dairy farming culture,” he said.

Total
0
Shares
People are also reading